By Nancy Herther

(Click here for Publishers Still Unsettled Over the Future of Ebooks: Part 1 – Public Libraries And The Reading Experience.)

“The library ecosystem,” explains EBSCO’s Kathleen  McEvoy, “starting with the libraries themselves to publishers and everyone in between, is going through significant transition. From mergers and acquisitions in the commercial part of the system to budget concerns and staffing changes in libraries, disruption is occurring.” She suggests the following “great articles highlighting the changes in libraries” as they provide perspectives on these changes:  “Clash in the Stacks,” “It Takes a University to Build a Library,” and “Pressing Challenges.”

“Recent changes in Europe show that even very large commercial publishers no longer have control,” McEvoy continues. “At one time vendors sold content to libraries and libraries acted almost like content warehouses to provide resources to their communities. That is shifting very rapidly under the impetus of technology. Content can be anywhere and everywhere; accessibility has replaced much of the importance of local “holdings.”  And a much larger universe of content is available now than ever before. So how does this impact the role of the library?  And the role of the vendors and publishers?”

Four University of Toronto librarians just published a study of eBook versus print preferences in academic libraries, finding that “although in many cases users preferred one format over another, they used books in both formats. If a subject was popular, usage tended to be high for both formats, and if unpopular, low for both formats. The data also indicated that there were some noticeable differences in eBook usage for particular subjects, and the authors concluded that format does matter, and therefore it is desirable for libraries to provide both formats if possible.”

Most academic libraries rely on book jobbers to handle core ordering (and cataloging) functions.  The basic terms negotiated depend on not only the desires of the publishers of individual titles, but the ability of each vendor to work out the best deals they can offer their library clients. Most academic libraries provide books offered through a variety of sources, allowing individual selectors to make the best available choice in pricing and usage limits.  For example, Ebrary terms for individual titles/publishers can allow for downloading entire books or download/copy limits by number of pages of chapters. For some EBSCO titles, a limit of up to 60 pages may be offered for printing or saving from individual titles, or in other cases no copying or pasting is allowed.

“From the perspective of EBSCO and GOBI, who work closely as partners both with libraries and publishers,” Kathleen McEvoy tells ATG, “we observe that publishers are, to paraphrase your question, unsure of the evolving role of libraries and that they feel they have little control over the library channel. At the highest levels of publisher (and vendor) management, there is a desire for the entire ecosystem to work more closely together and to share understanding. It would be a misleading to portray the overall publisher-library relationship as antagonistic or at odds with one another. Indeed, we are very much in this together.”

“It is correct to say that purchase and access models have become challenging. We’re optimistic that time, technology, and thoughtful members of the ecosystem will sort this out and that markets and human behavior, and technology will determine the path. From our perspective, there are two key factors to bear in mind impacting pricing: declining library budgets and new technology. Scholarly book publishers are working in a disadvantageous market. ARL data through 2012 shows that academic libraries receive a decreasing amount of university revenues:

Click here for PDF file

“Eminent scholars like Robert Darnton and Colin Steele, to name just two,” McEvoy continues, “have been talking about the challenges of scholarly book publishing and academic libraries for decades. Declining book sales have led to increased pricing as publishers struggle to maintain sustainable businesses. As fewer units are sold, the cost per unit increases. Most of the costs of publishing (editorial and overhead, sales & marketing, distribution) do not decline with e-Books. The average eBook sale price is about $125, while print is about $56. For a university press eBook the average is about $80, while print averages about $40. In both cases, we see that the e-book costs on average about double print. As with everything, there are always outliers, presses that abuse pricing are punished by the market – a book can be listed for $700, but not many libraries will purchase it. Textbooks and reference works are a different subject and they are not representative of the market broadly so lumping those costs in with eBook and print costs can create misperceptions.”

McEvoy reminds readers of comments by Oxford University Press’ Rebecca Seger and Lenny Allen in Against the Grain:  “These costs are made up primarily of expenses for copyediting, page composition, proofreading, and the author’s advance against royalties. This may surprise many readers, but these costs do not go away in the digital world. The actual “PPB” — paper, printing and binding — only makes up one-third of the costs. […] On top of that are indirect costs that you may not even think about, warehousing for one, in both physical and digital formats. There is a cost associated with warehousing a digital object for eternity, and in fact, with the variety of different platforms, publishers actually have to produce multiple forms of digital objects. […] All of this requires resources in order to have the processes, the people, and the third-party vendors needed to create all these formats. We also need metadata warehousing and distribution. If we wish to remain viable, we are all now required to send our metadata to discoverability services, and to the eBook aggregators and suppliers. On the sales side we have to manage the relationships with the resellers and work closely with the library community to ensure our business models and our content and our services are meeting the needs of libraries and their patrons. Our marketing team has to work closely with authors and ensure that those in the discipline are made aware of new titles of relevance to them. And this is far more important than ever before; if we are to be reliant on demand from users to drive purchasing, we have to make sure they know it’s available, and what it’s about. We work very closely with the author of every single book, which at OUP must be approved by the Delegates to the press, senior scholars around the world who are tasked with the simple mission of ensuring OUP is publishing scholarship of the highest quality. And royalties management — while royalties on 500 copy sales may not make a significant difference in the life of an academic, it does have to be managed and we have a responsibility to the author to continue to manage that payment as long as a work continues to sell, and there is a cost in stewarding that…. And let’s be very clear: not a single one of these publishing functions has or is likely to disappear in the digital era.”

McEvoy also cites the Ithaka study on the cost of a university press book as background to understanding the current landscape. “All that said,” McEvoy concludes, “it does appear that eBook prices have stabilized somewhat compared to the volatility of the past five to six years. Beyond declining budgets, journals as well as other content types have taken an enormous bite out of funds once dedicated to monograph acquisitions.”

TEXTBOOKS – STILL AN ISSUE

Governmental Consumer Price Index data clearly demonstrates the prices have increased more than 800% from 1978 to 2012. [see graphic below as well] And they continue to grow.  Students at University of Louisiana at Lafayette in lower-division accounting classes were surprised in September to find their core textbook costing $999 – a fee that the school’s administration have supported. According to a report in Inside Higher Education, citing a statement from university administration “faculty members in the accounting department wanted their students to have print textbooks so they could easily work through exercises in class without the use of laptops or tablets…. Rather than simply not offering an online-only option, Wiley and the accounting department at UL-Lafayette worked together to discourage students from buying the eBook — setting the price astronomically high and making the print option seem like a relatively good value.”  The price was brought down to equate with other format options. Still, the incident brings up the complex, often difficult situation for textbooks – electronic, print or a combination – which are still causing increased stress on the budgets of students in higher education.

(Click above to enlarge)

Open access models, as discussed in past ATG articles, are one answer.  Another company seeks to become the ‘Spotify for textbooks.’ Perlego has attracted $4.8million in funding to explore a new type of model for affordable college texts.  This British company, which already offers over 200,000 books from “the best educational publishers” as well as a selection of popular nonfiction titles, at a membership rate of about $15 US dollars.  A free 14-day preview is available to anyone as well, which are readable on virtually all current mobile environments.

“We are a true subscription model,” company CEO Van Malderen noted to Inside Higher Education. “For £12 per month you get unlimited access to the best textbooks. We do not operate a complex leasing model and publishers benefit [through] data collection, reduced piracy, no cannibalization from second-hand print sales.” The company believes this is a win-win for publishers as well, helping them “monetize their content to a large segment of price-sensitive students who would otherwise buy their books from the used-books market or download pirated copies. It also supplies publishers with detailed data on the consumption of titles.”

This Fall, the University of Massachusetts, Amherst switched from Amazon to operate their bookstore operations to ecampus.com, which is also being used by a growing number of colleges and universities. The company boasts that “we have continued to expand our partnerships with institutions across the country, ranging from large public universities to small private colleges. To date, eCampus.com is the trusted textbook solution for hundreds of higher educational institutions looking to increase textbook affordability and simplify the complexities of course material adoptions.”

In a Business Insider report, the school and ecampus.com stressed the advantage for students in having “every purchasing option, including new, used, rental, digital content, and an expansive network of third-party Marketplace sellers, saving up to 70% off publisher list prices. With nearly 80% of adopted titles available for rent, eCampus.com will offer a wide selection of discounted course materials, along with a price match guarantee program.”

Open Access continues as another option as well for course texts. However research continues to be published in monographs that may be electronic or print. Pricing remains an enigma.

THE INCREASINGLY ESSENTIAL ROLE OF BOOK JOBBERS

Given the amazing rates of change, the complexity of pricing and other issues that exist today, no individual library can hope to sort through all of this complexity. As McEvoy notes, “Both Overdrive and GOBI were acquired in recent years by technology companies (by Rakuten and EBSCO). This is a critical factor for their survival and evolution. It is also recognition of their value to their respective markets (Overdrive to public libraries, GOBI to academic libraries). GOBI has evolved and is evolving apace with the library world. Approval Plans, for example, are no longer a tool to simply ship books automatically; instead, they are a tool to identify an expanding universe of scholarly content and bring that content into the library as appropriate, which may mean as part of an eBook collection or a DDA Record – so well beyond the old print book delivery service of two decades ago. GOBI was the first vendor to offer an online interface to libraries (ahead even of Amazon). GOBI was first to offer consortial collection support online (developed with OhioLINK) and GOBI was first to integrate DDA into Approval Plans (with ebrary and NetLibrary). For scholarly publishers, GOBI is the largest vendor of eBooks (although because publishers are paid by the aggregators, it is not always immediately apparent to publishers that aggregator sales are made through GOBI). There is constant development in GOBI; these are very exciting times!”

Exciting times, indeed!

Just as publishers and libraries are dealing with uncertainty, academic libraries have many pain points today with publishers, especially over eBooks. The last part of this series looks at the extraordinary changes in distribution systems for books today.

Nancy K. Herther is librarian for Sociology & Anthropology at the University of Minnesota Libraries, Twin Cities campus. herther@umn.edu